The movement of materials all the way from supplier to end customer is the responsibility of Supply chain. Any disruption in the planned flow of materials at any stage will be appear as supply chain risk.
There is always risk of any unexpected events which effect and cause the disruption of flow of materials in their journey.
Supply chain disruptions pose an increasingly significant risk to supply chains. Supply chain disruptions, whether intentional or unintentional, have significant negative impact on both short and long-term operations and financial performance additionally, disruptions that impact product quality can result in product recalls which create the need for costly reverse supply chain activities.
Supply chain disruptions may result from a variety of unintentional causes such as accidents or natural disasters. There can also be intentional supply chain disruptions. Intentional disruptions may include theft, contamination/sabotage, or a terrorist attacks.
Examples of unintentional supply chain disruptions include:
· Hurricanes
· Tornadoes
· Floods
· Earth quakes
These accidents disrupt a supply chains’ transportation infrastructure, supply routes, and/or manufacturing facilities. An accident could cause transportation delays or production stoppages or could negatively impact product quality (e.g., contamination).
Logistics risks involves material handling, storage of products or raw materials, movement of material, damage/pilferage/theft, labeling & packaging the products, staffing & terrorism.
One of the aspects of maintaining a productive workplace is making sure that there are effective health, safety and security procedures in place. Effective procedures protect your employees, customers, guests and facilities from harm and damage. Review your health and safety procedures regularly with your management team to see if any changes need to be made to make the policies more effective.
Similarly terrorism is a great risk for supply chain & logistics. We have seen the 9/11 terrorism attack which laid down the drastic impact on international market & disrupt the supply chain network.
In Pakistan we have seen numerous terrorism incidents which directly affected the supply chain & logistics operations. When Law & order situations get worse we see terrorism attacks on goods transport, e.g; fire, ruin, theft of fleets & cargoes etc. This risk is associated higher with ocean, road & rail modes. While in Air transport there is chance of hijacking.
Law & order situations play a vital role for the economy. If the country or city is under non peaceful situation the economy will suffer as well as the supply chain. It would be difficult to transport or run business smoothly in such conditions. The transportation or distribution of goods get stuck for undefined time due to blockage and damage of roads or may get attacks due to vulnerable situations. Labor’s strike is also significant issue for any Supply Chain or Logistics Service providers (LSP) companies. Because due to strikes the operations stopped, hence the entire supply chain will suffer badly.
Transportation is the part of logistics which has a high exposure of risks such as the risk with the train transport is because the passage of train goes through the vast and non-populated area so there is a greater chance to get looted by the cargo looters & mostly the train gets accident due to disconnection of its path. In such situation the cargo gets damaged. In road transportation there is a chance of accidents such as collisions or attacks. In both situation cargo gets damaged or loss. Air transport is closed with more risks because air transport is prone to accidents. A small mistake can be very dangerous for passengers. Hijacking of planes is easily possible. Ocean transportation is also more risky because as compared to other means there is always danger of sinking ships or boats. Pipelines can be the target of vandalism, sabotage, or even terrorist attacks. In war, pipelines are often at the target of military attacks.
Route selection is one of the fundamental problems in emergency logistics management, which plays an important role in real applications. It is crucial to have alternative routes in case of emergency situations. The routes may be selected as per costs and taking consideration of safety measures of routes.
Cargo handling as an activity has evolved from being purely manually driven to an activity that is performed using the latest materials handling equipment money can buy. But, humans still have an important role to play in cargo handling, which essentially throws the doors opens for a diverse and serious range of safety concerns. It’s important that shipping personnel are well aware of the various considerations that need to be kept in mind to perform cargo handling operations on ships with utmost safety. Knowing the essential safety features, and making appropriate use of materials handling equipment are just some of the ways you can make sure you’re able to handle cargo safely on ships. Close supervision is needed to ensure work safety while handling bulk cargoes.
Loading and unloading can be dangerous. Machinery can seriously hurt people. Heavy loads, moving or overturning vehicles and working at height can all lead to injuries or death.
Some goods are difficult to secure during transport. Haulers and recipients will need to exchange information about loads in advance so that they can agree safe unloading procedures.
Checks must be made before unloading to make sure loads have not shifted during transit, and are not likely to move or fall when restraints are removed.
In order to mitigate the risks related to the supply chain & the logistics, there are some safety measures which can help to reduce the risks or it’s impact.
To avoid shortage of stock or if we fail to deliver the actual quantity we should maintain the safety stock & we should source multiple suppliers, and excess capacity. Logistics insurance is another way to share the risk.
To ensure the logistics operations safety there should be a proper monitoring of the sites, routes, vehicles & staffs through security escorts, CCTV cameras, RFID and Bar-coding for products tracking, GPS & Telematics for vehicle tracking.
It is also necessary to ensure that all individuals responsible for handling transfer, loading & unloading of materials must be trained adequately.
Workers should meet the following criteria:
· Physical fitness
· Vigilant
· Detail oriented
· Awareness related to handling of goods in case of any emergency
Managing risks in a supply chain and logistics can make or break a business. It is imperative to involve all stakeholders in the decision making process to ensure safety & security. Safety of premises is not the only concern pertaining to supply chain management. Handling of materials is also an important aspect of managing & maintaining an effective supply chain network. Training plays an integral role in ensuring a supply chain maintains its effectiveness & remains efficient.